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The term incentive has been defined differently by different authors. We
produce here a few of
these definitions.
According to the National Commission on Labor,
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The main features of incentives from the above definitions can be listed as
follows:
1
Incentives are based on a standard of performance for the job.
2
Incentives are measurable in monetary terms.

Incentives are meant to motivate workers for better and more
performance.
4
Incentives have direct linking to performance.
5
Incentives vary from person to person and from time to time for the
same person.
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LIMITATIONS
1. There is a possibility of reducing the quality of products since incentives
are ususlly based
on output.
2. workers paid by results disregard security regulation in order to aceive
output. It will
increase the danger of accidents
. some workers may work day and night, it would affect their health.
4. jealousy and conflict may arise among employees, because some
employees will earn
more .
5. workers may oppose introduction of new machines, methods as they fear
that new
methods or machines will decrease their earnigs.
6. when production is disrupted due to management fault, the workers will
insist to get
compensation.
An incentive scheme is usually based on three assumptions:
1. The belief that money is a strong motivator.
2. That the relationship between effort and reward can be systematically
established. The
relationship so based leaves no doubts in the minds of the concerned
employees.
. The feedback to the employees is immediate and direct.



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Incentives are classified as under.
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=INANCIAL AND NON =INANCIAL INCENTIVES
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INDIVIDUAL AND GROUP INCENTIVES
(a) =inancial incentives
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(b) Non financial incentives
As the employees have other needs like respect and self centered needs ,
they can be motivated
with the help of following non-financial incentives.
ü
[ob satisfaction
ü
[ob security
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Respect and recognition
ü
Training and other employee improvement programs
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Housing/medical/educational facilities
ü
Opportunities for growth.
ü
Suggestion scheme, praise, employee-superiors relationship etc
Individual incentives
Individual incentive are the extra compensation paid to an individual for all
production over a
specified quantity.
Advantages
1. Administration of individual incentives is simple because incentives can
be given after the
assessment of individual¶s work
2. each and everybody gets the return in accordance with work. This makes
the person more
dedicated towards the work.
. persons who do the work with less efficiency are not entitled to
incentives.
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. this incentive system is inappropriate where delays are frequent and
beyond the
individual¶s control as well as where the work is automated.
4. adverse effect on speeding production upon the health of the employee.
5. there is a problem of restriction of output in view of group pressures
from the fellow
employees.
Group Incentives
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Requirement of good incentive
1. proper climate: this means that the relation between management and
employees should
be good and free from suspicion
2. co-operation of workers
. worker¶s participation: wage incentive scheme should be implemented
with the

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